Utility Week

UTILITY Week 26th February 2016

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

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Page 25 of 31

Customers This week Water firms face flak for 'unearned profits' Ofwat says firms appear to make excess profits, but could do more to help vulnerable customers Ofwat chair Jonson Cox has warned the water industry it could face further condemnation from politicians and the public for making "unearned profits" as a result of low interest rates. His comments on excess prof- its come as the regulator tells companies they must do more to help vulnerable customers. Cox said: "We squeaked through one affordability crisis in 2013 thanks to some very proactive action, with the support of the companies. "I am really conscious we're going into another period of outperformance. Interest rates, everyone told me in PR14, were on the floor. Well, the floor has just lowered in the corporate debt markets." He added: "We need to remember that we will all have a choice on how we navigate the legitimacy of companies in the sector through challenges coming from what the public see as unearned profits." Cox was speaking at the launch of Ofwat's report into the sector's performance on vulnerable customers. The regulator said that although there has been a "big increase" in water companies' support for vulnerable customers, the sector still has a "long way to go" to meet customers' needs. It warned that company performance is mixed when it comes to offering effective and inclusive support. With unpaid bills an increasing problem, currently costing every water customer about £21 a year, Ofwat said a more tailored approach is "essential", and would benefit everyone. MB and LV EnErgy Most of big six favour doorstep selling ban The majority of the big six energy suppliers are against doorstep marketing, and will not call for the ban to be lied. Suppliers were banned from doorstep selling in 2012 aer the Competition and Markets Authority found customers who sign up to tariffs via direct sales paid more. In a straw poll conducted by Utility Week, Npower said it "would need to be convinced there's real consumer support around reinstating doorstep marketing" and EDF said it is "not currently looking to rein- troduce this approach". Eon and SSE also said they have no plans to call for the reintroduction of doorstep sales. British Gas declined to comment. Scottish Power does not sup- port the ban and wants to over- turn it to "reach customers who do not go online and remain on standard priced tariffs". EnErgy Supplier switching up by 15% in 2015 The number of customers switching energy supplier has reached its highest level since 2011, Ofgem's latest figures show. According to the data, 6.1 mil- lion switches occurred in 2015, a 15 per cent increase on 2014. Ofgem's 'Be an Energy Shop- per' campaign also revealed that over 40 per cent of the switches were to independent suppliers, rather than the big six. Ofgem has been advising consumers to look for a bet- ter deal on their energy bills through its campaign, claiming they could save about £200 a year by switching. gas 'Fuel poor need access to cheap gas' Government could do more to build on the success of the Fuel Poor Network Extension scheme in tackling fuel poverty, the Energy and Utilities Alliance (EUA) has said. EUA chief executive Mike Foster has echoed National Grid's call for the replacement scheme for the current Energy Company Obligation (ECO) to focus on facilitating access to the gas grid for consumers who are connected to or are close to a gas supply. Foster said as many as 500,000 customers are close to a gas supply but are not using gas appliances because they can't afford the retrofit of the boiler and the radiators that would let them take advantage of the cheaper unit price of gas. "That could well be an area where ECO could more closely align with the principle of extending the gas network, on the basis that it's a cheap fuel," he said. Cox: a new affordability crisis is looming I am the customer Alan Lovell "Water companies have learned valuable lessons" Earlier this month, our board visited Preston to discuss with water companies from the north of England some of the issues they have been grappling with. Flooding was high on the agenda as we explored the devastating impact the wettest December on record had had on communities. Staff from United Utilities, Yorkshire Water and Northumbrian Water were in the eye of the storm as they battled to protect infrastructure and safeguard essential services. able" when confronted with a whole host of circumstances, not just flooding. Companies also have to make operational changes to some treatment plants and other assets where power supplies or control panels fell foul of the rising flood waters. We hope to see evidence that these improve- ments lead to even less disrup- tion for water customers in the event of future flooding. Alan Lovell, chair, Consumer Council for Water For the most part they suc- ceeded, and I was impressed with how some other regional water companies had rallied to their aid. But the companies have also learned valuable lessons for future storms and floods. Companies faced difficulties tracking down some vulnerable customers who had been forced to evacuate their homes so they could get important assistance or information to them. In future, agencies hope to share information about the move- ment of people more effectively. Of course "customer vulnerabil- ity" is a complex issue in itself and companies must understand better who may be "vulner- 26 | 26th FEbruary - 3rd march 2016 | utILIty WEEK

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